YouTube announced its Your Film Festival
project today. One winner will get $500,000 and the chance to turn their
story into a worldwide phenomenon.

(Credit:
Screenshot by CNET)

If you're a storyteller, wouldn't you want the chance to have
"Gladiator" and "Blade Runner" auteur Ridley Scott help you with a
project? And wouldn't it be great to have half a million dollars to
spend on it?
That could be your future if you're the winner of YouTube's Your Film Festival, a competition to unearth the world's best storyteller that Google's video sharing site announced today.

Beginning February 2, YouTube will open up the film festival to anyone
in the world who's 18 or older and has a film they consider good enough
to stand up to global scrutiny.
"All genres and formats are welcome," the contest rules state, "live
action short, animation, documentary, Web-series episode, TV pilot--you
name it."
All that YouTube demands is that your video be story-driven and that it was never seen in public prior to January 1, 2010.
Contest judges will pick 50 semi-finalists, each of whose videos will
then be voted on by a global audience. The top 10 vote getters will get
then have their films shown at the 2012 Venice Film Festival. One winner
will then be selected by a jury led by Scott and given a half-million
dollar "production grant to work with Scott's team to create a new story
for the world to see."
All entries must be entered by March 31, YouTube says. Daniel Terdiman

#OpMegaUpload: like watching "War Games" play out, but with cyber-bombs.

In the aftermath of the Jan. 18 SOPA/PIPA blackout protests, the
Internet community had amassed quite a bit of goodwill, flexed its
muscles in a friendly, humorous, civil-disobedience kind of way, and,
remarkably, even managed to change quite a few minds.
Just 24 short hours later, Anonymous legions nuked that goodwill and
took cyber-security into thermonuclear territory. The real question now
is: were they played?
As I write this, #OpMegaUpload is in full effect. The Internet is seemingly coming down all around me. Global Internet traffic is fluctuating between 13 and 14 percent above normal,
and, as you can see from the above image, global network attacks were
up 24 percent. Affected sites include the White House, the FBI, the
Department of Justice, multiple record label sites, the MPAA and RIAA,
and the U.S. Copyright Office.
The attacks were spawned by a large-scale indictment and the arrest of
four people associated with a hosting and storage site called Megaupload, all accused of online piracy.
In a collective rage, Anonymous lashed out with the force of a
cyber-nuke. The display of power is awesome--there will be a lot of
high-fiving hackers tonight, that's for sure. And given the massive
power of the legions, this story will get more attention in just a few
hours than the SOPA/PIPA blackouts ever did. WIN!
But then the other shoe will drop.

My sources tell me the timing of the Megaupload arrests was no accident.
The federal government, they say, was spoiling for a fight after the
apparent defeat of SOPA/PIPA and not a little humiliation at the hands
of the Web. And what better way to bolster the cause for cyber-crackdown
than by pointing to a massive display of cyber-terrorism at the hands
of everyone's favorite Internet boogeyman: Anonymous?
If the SOPA/PIPA protests were the Web's moment of inspiring,
non-violent, hand-holding civil disobedience, #OpMegaUpload feels like
the unsettling wave of
car-burning
hooligans that sweep in and incite the riot portion of the play. The
result is always riot gear, tear gas, arrests, injury, and a sea of
knee-jerk policies, laws, and reactions that address the destructive
actions of a few, and not the good intentions of the many.
I don't truly know whether Anonymous was cleverly goaded into
#OpMegaUpload. But I do know that an attack this big on this many
government sites will effectively erase those good Internet vibrations
that were rattling around Capitol Hill this week, and harden the
perspective of legislators and law enforcement who want to believe that
the Web community is made up of wild, law-breaking pirates. That,
ultimately, may help strengthen the business--and the emotional--case
for the pro-SOPA, pro-PIPA lobby. Did the feds just get the last lulz?

Molly
Wood is an executive editor at CNET, host of the Buzz Report, Buzz Out
Loud, and Tech Review at CNET TV, and author of the Molly Rants blog.
When she's not enraging fanboys of all stripes, she can be found
offering tech opinions on CBS and elsewhere, and offering opinions on
everything else to anyone who will listen.

MegaUpload has been shut down by the US federal government. Remind us why we need stronger anti-piracy laws again...

File-sharing mecca MegaUpload.com is dead, shut down at the hands of the US federal government. The Federal Bureau of Investigation has arrested four people, and charged three others, in the anti-piracy sting. The forced closure of MegaUpload comes just one day after a mass online protest
against two pieces of legislation that aim to increase the power of
copyright holders to block access to websites that illegally distribute
intellectual property, like music and movies.
Those arrested include MegaUpload founder Kim “Dotcom” Schmitz, along
with three others related to the site. The group was apprehended in New
Zealand, with the help of that country’s authorities. MegaUpload is
officially a Hong Kong-based company, though according to the Justice
Department, it also has servers in Ashburn, VA, Washington DC, the
Netherlands and Canada. Schmidtz is a resident of both Hong Kong and New
Zealand.
The indictment against MegaUpload, a site that allowed users to
upload anything from a text file to a full feature film, then share a
link to the file with others, says the site cost copyright holders more
than $500 million in lost revenue by making their intellectual property
free to download. It also says that MegaUpload (aka “the conspirators”)
earned $175 million in profits from advertising and premium memberships.
Schmitz alone earned $42 million in 2010 from the site, the indictment
claims.
In a statement posted to MegaUpload, before its takedown, the company
asserted that the majority of its content was legitimate, and the
claims of lost revenue were “grotesquely overblown.”
“The fact is that the vast majority of Mega’s Internet traffic is
legitimate, and we are here to stay. If the content industry would like
to take advantage of our popularity, we are happy to enter into a
dialogue. We have some good ideas. Please get in touch,” the company
said.
MegaUpload boasted “more than 150 million registered users, 50
million daily visitors and accounting for four percent of the total
traffic on the Internet,” according to the Justice Department, whose website was also unable to load, at the start of this writing. According to Twitter user AnonymousIRC,
a highly-popular account related to the hacktivist group ‘Anonymous,’
the DoJ’s website appeared to have been “besieged by pirates.” It is
unclear at this time whether Anonymous had anything to do with the
outage, which has since been resolved.
In addition to having been one of the most-widely-used file-sharing
sites on the Web, MegaUpload is also unique because of its endorsements
from artists like Kanye West, Will.i.am, and Alicia Keys. Kim
Kardashian, who is not an artist, also endorsed the site. Renowned
rapper, producer, and NYU professor Kaseem “Swizz Beatz” Dean is listed
as MegaUpload’s CEO. (Not coincidentally, Beatz is also Alicia Keys’
husband.) Judging by his recent tweets, the last of which came five
hours ago, Beatz still appears to be free, and apparently just ate some Chinese food.

Federal authorities say that the timing of MegaUpload’s takedown had
nothing to do with Wednesday’s blackout protest against the “Stop Online Piracy Act” (SOPA) and the “PROTECT IP Act” (PIPA).
And that’s most certainly true; this kind of sting doesn’t just happen
overnight. But that doesn’t mean the two will remain unrelated in the
minds of the public.
This case clearly proves that our government already has the ability
to shutdown a website, whose company is based in Hong Kong, and have its
employees arrested by the police of another foreign country. That isn’t
exactly a compelling argument for giving copyright holders and the
federal government more power to combat piracy from “foreign rogue
websites,” which is the primary aim of both SOPA and PIPA.
Of course, it appears as though MegaUpload isn’t actually considered a
“foreign” rogue site, even though its base of operations is in China,
due to the fact that it had servers housed in the US. SOPA and PIPA
gives the power to block access to — but not entirely shut down —
websites that operate exclusively outside the US. After this monstrous
display of muscle flexing, however, we doubt many people will have
sympathy for that distinction.
That said, combating the piracy of websites that operate outside the
rule of US law really isn’t a matter of contention in the SOPA/PIPA
debate. It’s all the “unintended consequences” and “collateral damage”
that educated critics say the bills’ loose wording could lead to —
things like the blockage of legitimate free speech, the squashing of
online innovation, and the potential damage to the Internet’s
infrastructure — that have the masses seething. The takedown of
MegaUpload merely shows that our anti-piracy laws aren’t as weak as some
would like us to believe.

Thursday, 19 January 2012

The Internet Strikes Back #OpMegaupload

Within minutes of the site being shut down, and DOJ releasing its
statement, Anonymous sprang into action and started taking down a ton of
sites -- including websites for the DOJ, the US Copyright Office,
Universal Music, the RIAA, the MPAA and a bunch of other sites.

Anonymous launches largest attack ever, crippling government and music
industry sites. Hacktivists with the collective Anonymous are waging an
attack on the website for the White House after successfully breaking
the sites for the Department of Justice, Universal Music Group, RIAA and
Motion Picture Association of America.

Many members of Congress have just changed their stance on the
controversial Stop Online Piracy Act, or SOPA, the raid on Megaupload
Thursday proved that the feds don’t need SOPA or its sister legislation,
PIPA, in order to pose a blow to the Web.

Hackers Anonymous announced this afternoon that they would attack the web sites of Universal Music Group, the RIAA and the U.S. Department Of Justice.
As of 6:30PM Thursday, a review of each site showed that the hackers
had been successful. The attacks came in response to the government
forced takedown of file sharing site Megaupload and the arrest of key
executives. (Full story of the indictments here.)

The Motion Picture Association Of America site had also been hacked but appeared restored by early evening.
On their main Twitter acount,
the hackers declared: "The Largest Attack Ever by Anonymous - 5,635
People Confirmed Using #LOIC to Bring Down Sites! #Anonymous" and "The
Largest Attack Ever by Anonymous - 5,635 People Confirmed Using #LOIC to
Bring Down Sites! #Anonymous".MORE:

Megaupload defendants’ property includes 15 Mercedes, a Lamborghini, a Maserati, and a Rolls

The Department of Justice has charged Megaupload with a “mega
conspiracy” that, it alleges, netted the company’s executives a vast
cache of money and luxury cars.
The indictment (see below for the full text) refers to Megaupload’s
offenses as the “Mega Conspiracy.” The company has been charged with
five different counts concerning copyright infringement and money
laundering. According to the indictment, Megaupload’s offenses include:

Running Megavideo.com, which streams copyright infringed television shows and movies

“Willfully reproduced and distributed” copyrighted content on its servers

Offering money as an incentive to upload infringing content between the dates of Septmeber 2005 and July 2011

Not terminating copyright offending accounts, as it states it can do in the Megaupload terms of service

“Made no significant effort to identify users” of the site, uploaders of copyrighted content, or the content itself

If found guilty, the defendants could spend up to 20 years in jail and might be liable for up to $175 million in fines.
But the property that the Feds have seized from the defendants is
what’s really eye-opening about this indictment. It lists a number of
bank accounts, PayPal accounts, 15 Mercedes-Benz vehicles, a Rolls-Royce
with the license number “GOD,” a rare Lamborghini and a aserati. It
seems the defendants had a number of vehicles with creative license
plate “numbers” including the before mentioned “GOD,” “HACKER,”
“POLICE,” “STONED,” “GUILTY,” “GOOD,” and “CEO.”
In addition, the indictment alleges that the company or its
associates spent a total of almost $8 million on yacht rentals in the
Mediterranean from April to June, 2011 alone.
Here’s the full list of seized goods, not counting bank accounts:

Artwork, In High Spirits, Olaf Mueller photos from The Cat Street Gallery;

Sharp 108” LCD Display TV;

Sharp 108” LCD Display TV;

Sony PMW-F3K Camera S/N 0200231;

Sony PMW-F3K Camera S/N 0200561;

Artwork, Predator Statue;

Artwork, Christian Colin;

Artwork, Anonymous Hooded Sculpture;

2009 Mercedes-Benz ML350 CDI 4MATIC Off-Roader;

Sharp LC-65XS1M 65” LCD TV;

Sharp LC-65XS1M 65” LCD TV;

TVLogic 56” LUM56W TV;

Sixty (60) Dell R710 computer servers.

In response to the hacks, hacker collective Anonymous took down the
Department of Justice’s website, along with other music label sites.
According to a tweet by @YourAnonNews,
an impressive 5,635 Anonymous members contributed to the site attacks.
It is rumored the group is planing to attack WhiteHouse.gov. The take
down tactic being used is called LOIC, otherwise known as a low orbit
ion cannon. LOIC is a public system that can be used to perform denial
of service attacks.
The five different counts Megaupload faces include conspiracy to
commit racketeering, conspiracy to commit copyright infringement,
conspiracy to commit money laundering, criminal copyright infringement
by distributing a copyrighted work being prepared for commercial
distribution on a computer network & aiding and abetting of criminal
copyright infringement, and criminal copyright infringement by
electronic means & aiding and abetting of criminal copyright
infringement.
Check out the indictment on Scribd, belowMega Indictment

Utah Blue Alert program now active!

The "Blue Alert" program
is now active in Utah! After several years of working to implement
this program the Utah Chiefs of Police Association and the Utah Attorney
General's Office announced on October 17, 2011 the Blue Alert program
is now up and running in Utah. The blue Alert program is a voluntary
partnership between law enforcement and local broadcasters to rapidly
disseminate information to law enforcement agencies, broadcasters and
teh public about violent suspects who have killed or seriously injured a
law enforcement officer and pose a threat to the public. For more
information click here.

Google Street View is now Google Store View. A recently
released feature of the well-known mapping app lets you go inside
participating businesses remotely and take a look around. B&H’s
giant photo and video store in Manhattan, above, is one of the first to
invite Google into their establishment.
When you look up B&H on Google Maps (B&H Photo Video Super Store, 9th Avenue, New York, NY),
you can click through a virtual tour of the space, zooming in and
shuffling around the same way you would on any street view map. While
the store is mostly empty, you can still see a couple straggling
customers who wandered in as opening hours approached.
“We thought it would be cool for people who can’t come to New York to
be able to take a virtual tour,” says Bryan Formhals, B&H’s social
media manager. “We wanted to create a bridge between what we do online
and what we do in New York.”

Screenshot: Google Maps.

Formhals had heard Google was considering the project, so B&H
contacted them and offered to open their doors. The Google folks stopped
by at 7 a.m. – two hours before opening – and scanned in the first
floor of the superstore, using GPS devices to ensure the location
services were accurate.
According to Formhals, Google told them they didn’t have the
technology in place to offer street view on upper floors, they scanned
the second floor of B&H anyway. Hopefully that means the little
orange man in Google Maps will soon be able to climb stairs, too.

Anonymous Reacts to Megaupload Takedown With “Largest Attack Ever”

Hacker group Anonymous isn’t happy about the takedown of file-sharing site Megaupload, and as a result, it’s targeting some big companies and government agencies are going to
Earlier this afternoon, interspersed with a stream of anti-SOPA and PIPA tweets, Anonymous the main Anonymous Twitter account
declared, “The government takes down #Megaupload? 15 minutes later
#Anonymous takes down government & record label sites. #ExpectUs.”
Specifically, the group claimed responsibility for taking down the
Universal Music, RIAA (the record industry’s lobbying arm), MPAA (the
movie industry’s lobbying arm), and Department of Justice websites,
among others. As of 3pm Pacific, the sites were still down for me,
although some comments on Twitter suggested that they were returning
online sporadically.
The group also claimed that
the current attacks were “the largest attack ever by Anonymous,” with
5,635 participants. And it looks like the campaign is ongoing —
Anonymous says it’s going after the FBI’s website next: “Get some
popcorn… it’s going to be a long lulzy night.”

Megaupload defendants’ property includes 15 Mercedes, a Lamborghini, a Maserati, and a Rolls

The Department of Justice has charged Megaupload with a “mega
conspiracy” that, it alleges, netted the company’s executives a vast
cache of money and luxury cars.
The indictment (see below for the full text) refers to Megaupload’s
offenses as the “Mega Conspiracy.” The company has been charged with
five different counts concerning copyright infringement and money
laundering. According to the indictment, Megaupload’s offenses include:

Running Megavideo.com, which streams copyright infringed television shows and movies

“Willfully reproduced and distributed” copyrighted content on its servers

Offering money as an incentive to upload infringing content between the dates of Septmeber 2005 and July 2011

Not terminating copyright offending accounts, as it states it can do in the Megaupload terms of service

“Made no significant effort to identify users” of the site, uploaders of copyrighted content, or the content itself

If found guilty, the defendants could spend up to 20 years in jail and might be liable for up to $175 million in fines.
But the property that the Feds have seized from the defendants is
what’s really eye-opening about this indictment. It lists a number of
bank accounts, PayPal accounts, 15 Mercedes-Benz vehicles, a Rolls-Royce
with the license number “GOD,” a rare Lamborghini and a aserati. It
seems the defendants had a number of vehicles with creative license
plate “numbers” including the before mentioned “GOD,” “HACKER,”
“POLICE,” “STONED,” “GUILTY,” “GOOD,” and “CEO.”
In addition, the indictment alleges that the company or its
associates spent a total of almost $8 million on yacht rentals in the
Mediterranean from April to June, 2011 alone.
Here’s the full list of seized goods, not counting bank accounts:

Artwork, In High Spirits, Olaf Mueller photos from The Cat Street Gallery;

Sharp 108” LCD Display TV;

Sharp 108” LCD Display TV;

Sony PMW-F3K Camera S/N 0200231;

Sony PMW-F3K Camera S/N 0200561;

Artwork, Predator Statue;

Artwork, Christian Colin;

Artwork, Anonymous Hooded Sculpture;

2009 Mercedes-Benz ML350 CDI 4MATIC Off-Roader;

Sharp LC-65XS1M 65” LCD TV;

Sharp LC-65XS1M 65” LCD TV;

TVLogic 56” LUM56W TV;

Sixty (60) Dell R710 computer servers.

In response to the hacks, hacker collective Anonymous took down the
Department of Justice’s website, along with other music label sites.
According to a tweet by @YourAnonNews,
an impressive 5,635 Anonymous members contributed to the site attacks.
It is rumored the group is planing to attack WhiteHouse.gov. The take
down tactic being used is called LOIC, otherwise known as a low orbit
ion cannon. LOIC is a public system that can be used to perform denial
of service attacks.
The five different counts Megaupload faces include conspiracy to
commit racketeering, conspiracy to commit copyright infringement,
conspiracy to commit money laundering, criminal copyright infringement
by distributing a copyrighted work being prepared for commercial
distribution on a computer network & aiding and abetting of criminal
copyright infringement, and criminal copyright infringement by
electronic means & aiding and abetting of criminal copyright
infringement.
Check out the indictment on Scribd, below:

Wide open spaces in cities are becoming an increasingly scarce commodity as the world's urban population continues to expand.Now an architect has developed a floating park that is a haven for wildlife and will in turn address the rise in pollution.Koen
Olthuis, of Dutch firm Waterstudio, has unveiled the Sea Tree, a
multi-tiered structure comprising of layered green habitats.

Urban future: The Sea Tree offshore nature park will be a haven for wildlife and will address the rise in pollution

The water-based park will
provide valuable living areas for birds, bees, bats and other small
animals, bringing positive green effects to urban environments.It will also extend underwater, providing aquatic creatures with an environment to thrive.

More...

Designed for use in cities with large waterways, such as London and New York, the Sea Trek will not be accessible to humans.Mr
Olthuis came up with the concept because it is so difficult to add
extra park zones to a city on land. Open space such as rivers, seas,
lakes and harbours should instead be utilised, he believes.He
proposes using offshore technology similar to oil rigs to construct the
Sea Trees and has even suggested that oil companies donate them to
cities to show 'their concern for a better city environment'.

Anchored: The water-based park will provide
valuable living areas for birds, bees, bats and other small animals,
bringing positive green effects to urban environments. It will also
provide a habitat for aquatic creatures

Eco-friendly: Designed for use in cities with
large waterways, such as London and New York, the Sea Trek will not be
accessible to humans

The
giant floating towers would be moored to the seabed with underwater
cables; the height and depth of the Sea Tree can be adjusted depending
on the location.Mr Olthuis
said: 'Underwater, the Sea Tree provides a habitat for small water
creatures or even, when the climate allows for it, artificial coral
reefs.'The beauty of the
design is that it provides a solution and at the same time does not cost
expensive space on land, while the effect of the species living in the
sea tree will affect a zone of several miles around the moored
location.'Waterstudio
claims the structure will be fully realised within two years and that an
undisclosed client has already expressed a keen interest.

Positive effect: The Sea Tree will allow all
sorts of wildlife to thrive in areas of cities where it previously was
unable to do so

Above and below: Airborne creatures will occupy
the top half of the Sea Tree, while underwater an aquatic environment
will thrive

The daughter of Cuba's president says the
communist state will consider later this year whether to legalize
same-sex civil unions but not gay marriage.

Director of Cuba's
National Center for Sexual Education, Mariela Castro, who is the
daughter of President Raúl Castro, speaks during a march in Havana
against homophobia on May 14. (Adalberto Roque/AFP/Getty Images)

Mariela Castro, the daughter of President Raúl Castro and niece of the
revolutionary leader Fidel Castro, has announced that Cuba this year
will consider creating civil unions for gay couples, according to the Agence France-Presse news agency.
"According to the Justice Minister [Maria Esther Reus]... it is going
to be discussed in the assembly, and is on the agenda for 2012," Castro,
a sex educator, told the state website "Cuba Si."More from GlobalPost: A more open Cuba, blessed by the Pope
The Cuban state will consider civil unions but not gay marriage,
according to AFP. Castro, head of Cuba's National Sex Education Center,
was also quoted as saying she believed the Communist Party of Cuba would adopt a "non-discrimination policy" at a conference scheduled for Jan 28.
According to The Associated Press,
many gays and transsexuals were persecuted in the years following
Cuba's revolution of 1959 but the news agency says attitudes on the
island are changing: gay pride events now occur annually while the state
sponsors anti-homophobia campaigns and even pays for sex change
operations.
To continue her campaigns against anti-homosexual prejudices, in November, Mariela Castro opened a Twitter account and now runs a blog.More from GlobalPost: Cuba slams Twitter for fueling Fidel death rumor
In Canada, the government has promised to close a legal loophole that
had left foreigners in same-sex marriages there wondering if their
unions were legally valid, according to Reuters.
In a speech given Friday, Canadian Justice Minister Rob Nicholson said
his government would seek to rewrite marriage laws to allow same-sex
marriages performed for foreigners in Canada to be subject to divorce
proceedings — and therefore remain valid — even if the unions were not
recognized by the spouses' home jurisdictions, according to The Toronto Star.

The matter burst to the fore on Thursday when court papers emerged
showing that a Florida woman and the British woman she married in Canada
might not be able to divorce since their union was not recognized by
either of their home jurisdictions.

Although it is not apparent on his financial disclosure form, Mitt Romney
has millions of dollars of his personal wealth in investment funds set
up in the Cayman Islands, a notorious Caribbean tax haven.
A spokesperson for the Romney campaign says Romney follows all tax laws
and he would pay the same in taxes regardless of where the funds are
based.
As the race for the Republican nomination heats up, Mitt Romney
is finding it increasingly difficult to maintain a shroud of secrecy
around the details about his vast personal wealth, including, as ABC
News has discovered, his investment in funds located offshore and his
ability to pay a lower tax rate.
"His personal finances are a poster child of what's wrong with the
American tax system," said Jack Blum, a Washington lawyer who is an
authority on tax enforcement and offshore banking.
On Tuesday, Romney disclosed that he has been paying a far lower
percentage in taxes than most Americans, around 15 percent of his annual
earnings. It has been Romney's Republican rivals who have driven the
tax issue onto center stage. For weeks, Romney has cited a desire for
privacy as his reason for not sharing his tax returns -- a gesture of
transparency that is now expected from presidential contenders.
"I can tell you we follow the tax laws," he said recently while on the
campaign trail in New Hampshire. "And if there's an opportunity to save
taxes, we like anybody else in this country will follow that
opportunity."

But tax experts tell ABC News there are other reasons Romney may not
want the public viewing his returns. As one of the wealthiest candidates
to run for president in recent times, Romney has used a variety of
techniques to help minimize the taxes on his estimated $250 million
fortune. In addition to paying the lower tax rate on his investment
income, Romney has as much as $8 million invested in at least 12 funds
listed on a Cayman Islands registry. Another investment, which Romney
reports as being worth between $5 million and $25 million, shows up on
securities records as having been domiciled in the Caymans.
Official documents reviewed by ABC News show that Bain Capital, the private equity partnership Romney once ran, has set up some 138 secretive offshore funds in the Caymans.
Romney campaign officials and those at Bain Capital tell ABC News that
the purpose of setting up those accounts in the Cayman Islands is to
help attract money from foreign investors, and that the accounts provide
no tax advantage to American investors like Romney. Romney, the
campaign said, has paid all U.S. taxes on income derived from those
investments.
"The tax consequences to the Romneys are the very same whether the fund
is domiciled here or another country," a campaign official said in
response to questions. "Gov. and Mrs. Romney have money invested in
funds that the trustee has determined to be attractive investment
opportunities, and those funds are domiciled wherever the fund sponsors
happen to organize the funds."
Bain officials called the decision to locate some funds offshore
routine, and a benefit only to foreign investors who do not want to be
subjected to U.S. taxes.
Tax experts agree that Romney remains subject to American taxes. But
they say the offshore accounts have provided him -- and Bain -- with
other potential financial benefits, such as higher management fees and
greater foreign interest, all at the expense of the U.S. Treasury.
Rebecca J. Wilkins, a tax policy expert with Citizens for Tax Justice,
said the federal government loses an estimated $100 billion a year
because of tax havens.
Blum, the D.C. tax lawyer, said working through an offshore investment
vehicle allows the investor to "avoid a whole series of small traps in
the tax code that ordinary people would face if they paid tax on an
onshore basis."
Wilkins agreed, saying the "primary advantage to setting those funds up
in an offshore jurisdiction like the Cayman Islands or Bermuda is it
helps the investors avoid tax."
"It helps U.S. investors avoid U.S. tax," said Wilkins, "it helps
foreign investors avoid taxes in their home country, so it's not illegal
or improper to set those funds up in a foreign jurisdiction, but it
makes it more attractive to investors because it helps them avoid paying
taxes on that income."

Bain Accounts in the Cayman Islands

Bain's presence in the Cayman Islands is not something the firm advertises. The Los Angeles Times first disclosed
Romney's offshore accounts in 2007, during his initial run for the
presidency. ABC News found references to the firm's accounts in the
Caymans in the footnotes of securities filings. When ABC News went to
the office address listed for Romney's Bain funds, lawyers in the
Caymans were not eager to answer questions.
Asked if he could confirm the existence of the Bain accounts, David
Byrne, the chief marketing officer for the law firm Walkers, listed on
documents as Bain's Caymans' representative, said he could not. "No, I
can't at all," said Byrne. "Unfortunately, I can't comment at all on
that."
There is now less secrecy than there was even two weeks ago surrounding
Romney's tax rate. The money he made through Bain investments was taxed
as capital gains at a 15 percent rate, instead of the higher tax rates
borne by most Americans. Newt Gingrich told reporters Wednesday that his
income was taxed at 31 percent.

The so-called "carried interest" rule has been the source of extensive
debate in Washington, with opponents criticizing the allowance to tax
those earnings at 15 percent a glaring loophole that benefits only the
wealthiest Americans. Under the carried interest rule, income that is
determined to be capital gains – like the profit reaped by hedge fund
managers -- is subject to the lower 15 percent rate.
Wilkins said Romney's arrangements reminded her of the now famous
remarks by billionaire financier Warren Buffet, who revealed in 2007
that he was paying taxes at a lower rate than his receptionist.
"Well, I think it's the issue that is sort of on the front page every
day, when we look at the Occupy Wall Street movement and that people are
really losing patience with the idea that a lot of multinational
corporations have and a lot of wealthy people have that while they
benefit from everything this country has to offer … they don't seem to
be willing to pay their fair share," she said.

Romney, who left Bain in 1999, has confirmed that his earnings largely
come from investments, and the tax rate he pays is consistent with that
"because my last 10 years, my income comes overwhelmingly from some
investments made in the past, whether ordinary income or earned
annually. I got a little bit of income from my book, but I gave that all
away. And then I get speaker's fees from time to time, but not very
much."